Gigabit City Broadband Becomes a Newmarket Municipal Election Issue

All Canadians need to pay attention to what is happening in Newmarket, Ontario regarding the deployment of gigabit broadband technology. The Town is not waiting around for the incumbent oligopoly Telephone and Cable companies to deploy gigabit broadband and proactively taking matters into its own hands.

In the 21st century economy, innovation leadership is necessary for economic leadership. The Canadian broadband infrastructure can be a central platform enabling innovation, and faster speeds will spur innovation. In a global economy, talent and capital can flow anywhere, and will flow to countries with the strongest innovation infrastructure. We are in a global bandwidth race, and need to ensure Canada has a strategic bandwidth advantage. Without it, the country risks watching jobs and investment flow elsewhere.

Gigabit networks can enable eServices such as genetic sequencing to treat cancer patients, creative software to support lifelong learning from home, and ways for small businesses to take advantage of Big Data. Greater network speeds will certainly lead to unexpected new inventions.

Newmarket, Ontario is one community that wants to achieve innovation and economic prosperity by deploying gigabit broadband technology starting with its business corridors.

On October 7, at the Newmarket Theatre political debate, gigabit broadband became a contentious election issue. Incumbent Regional Councillor, John Taylor, and Mayor Tony Van Bynen are clearly running on implementing gigabit broadband corridor for strategic economic development. Regional councillor contender, Darryl Wolk, and mayoralty candidates, Chris Campbell, and Dorian Baxter are clearly against the gigabit broadband – initiative and say that they will cancel it if elected.

Last month, outgoing Newmarket Council approved a Request for Proposal (RFP) for deploying gigabit broadband pilot on Main St., around the Southlake Hospital area, and the Leslie St., Harry Walker Parkway corridor. This follows the recommendation of Sandel & Associates, an American consultancy with experience in gigabit broadband city in St. Louis, and the Kansas City Google deployment. The report recommends a gigabit broadband – pilot and estimates that deploying this in the three areas will create 17 new businesses with 205 direct jobs, 126 indirect jobs, approximately $15,000,000 in new wages, and additional $13,000,000 of economic output value resulting from the new wages spend. The Town may have to invest anywhere from $290,000 to $1,140,000 to support the pilot, but will seek to collaborate with private sector businesses to implement and operate the network.

The Report also recommends assessing the pilot and determining the viability of wiring the rest of Newmarket.

Town staff is to make recommendations from the soon to be released RFP to the newly elected council early in the New Year on how to move the gigabit broadband – pilot forward.

Darryl Wolk does not support the gigabit – broadband initiative, referring to the Chattanooga, Tennessee deployment as a $330M investment that only created 1,000 jobs.

Newmarket versus Chattanooga

Comparing Newmarket to Chattanooga is not a reasonable comparison.

Chattanooga has indeed invested $330M into its city infrastructure, raising $220 million in bond money and $111.5 million in US federal stimulus dollars. The City’s power utility company, EPB is the most important fibre customer. The power company has hooked up its fibre optic network to the local smart grid, which includes 170,000 intelligent electric meters reporting to the company via Internet every 15 minutes. The grid also includes 1,200 switches that route energy around the grid. It operates 8,000 miles of fibre for 56,000 commercial and residential Internet customers. It has created more than 3,700 jobs.

Chattanooga has a population of 170,000, twice that of Newmarket. Chattanooga is over four times the geographic size covering 370 sq. KM compared to Newmarket’s 38 sq. KM. In addition, the Chattanooga service footprint covers five times the city area, which is just less than 1000 sq. KM. That is over 26 times the geographic size of Newmarket.

Chattanooga has attracted new business such as two Amazon distribution centres and the Volkswagen head office, manufacturing facility citing gigabit broadband as a reason to locate there. Many cities are following Chattanooga’s lead and consider it a model for smart grid and broadband deployment. Chattanooga also achieved worldwide attention when awarded the Global Intelligent Community of the Year, attracting further investment.

Chattanooga is not alone in pursuing broadband infrastructure as a strategic differentiator – many communities across North America and the world are doing so; Windsor, Stratford, Waterloo, Muskoka and a coalition of Eastern Ontario communities have also made these investments, specifically as a foundation for competitive economic development. There is a significant amount of research and many publications that detail the benefits of community broadband and the associated economic benefits that are freely and publicly available online, most notably at the Intelligent Community Forum website.

Newmarket Potential Gigabit City Costs

Fibre-to-the-Home (FTTH) costs, similar to other technology costs are decreasing. Typical broadband gigabit city FTTH costs range from $800 – $1500 per household and $20K to $40K per KM, all in costs that include electronics. The potential Newmarket all in multi-year capital cost to wire the entire Town should be in the order of $30M. There are also funding options available that do not affect the municipal taxpayer that the RFP process will identify.

Why Should the Town Support Gigabit City Broadband

As much as railroads, electricity, telephone, and paved roads were the engines of community wealth creation, the 21st Century community will depend on embracing the enabler of the knowledge economy, gigabit broadband FTTH. The major cable and telephone companies, the Telecom Oligopoly, are reluctant to invest in FTTH, choosing other higher return capital investments like cellular networks or acquiring content and media properties. Their approach is to “sweat the copper”, essentially, try to get the most out of the existing infrastructure for the least amount of investment. Further, their consideration for making investments is based on residential density and demand, not on the needs of new economy businesses, innovators and entpreneurs. For communities to prosper in the 21st Century, they will have to lead the deployment gigabit broadband city FTTH.

There are over 400 successful community-based broadband networks, with 150 deploying fibre optic networks of some form, mostly in the United States. They have overcome the Telco/Cableco resistance, and now experience increased economic activity.

A study supported by the FTTH Council, which includes telephone and cable companies, and published by the US based Analysis Group found that communities where gigabit broadband was widely available enjoyed higher GDP, relative to similar communities where gigabit broadband was not available. The 14 communities with widely available gigabit broadband that are part of the study enjoyed over $1 billion in additional GDP when gigabit broadband became widely available, relative to communities where gigabit broadband was not widely available.

The study purports incremental economic benefits from widely available gigabit broadband of an additional 1.1 percent GDP, which are consistent with the measured economic benefits from the introduction of first generation broadband technologies (DSL, cable modem).

There are also OECD studies that correlate increasing GDP with broadband penetration and speed.

In addition, the US history of community-based network deployment indicate that incumbent Telco/Cablecos only start offering competitive gigabit services in jurisdictions that have community based or Google deployed networks.

There are 19 US states, where the incumbent Telco/Cablecos have successfully lobbied the state governments to make community-based networks illegal. The Federal Communications Commission (FCC) is considering overturning these laws to increase competition an enable communities to install gigabit broadband networks.

Broad Consultation

The Newmarket initiative is not happening in isolation with a small number of people. It is built on extensive and long-standing consultations at a municipal and regional level, starting more than 10 years ago. The Region of York recently completed a Broadband feasibility study that identified both the need (service gaps) and the strategic importance of broadband to each municipality and to the Region as a whole. This process included consultations with the public, schools, hospitals, police, fire/EMS services, libraries, municipal staff, and the business community. The resulting report is publicly available on the Region’s website and has been for at least 6 months.

Further, the Newmarket consultation process with Sandel & Associates included three days of one-on-one and group meetings with key stakeholders and businesses within the community, including small businesses on Davis Drive and Main Street, building and landowners, developers, digital media/IT firms in Newmarket, and companies that are some of Newmarket’s largest employers. The Library, Chamber, Hospital, Town, and School Boards were all part of the discussion, and all elected officials were invited to participate in the sessions. The report was reviewed by the Newmarket Economic Development Advisory Committee (NEDAC), who are local business leaders who volunteer their time to work with Council and Town staff on key business issues. NEDAC issued a recommendation to Council to proceed with the initiative. These are the voices of small, medium, and large businesses in Newmarket.

Newmarket needs to diversify its economy and attract knowledge workers. Otherwise, it will remain a bedroom community with its residents stuck in GTA gridlock. The broadband gigabit city initiative is a necessary step in achieving this.

The facts speak for themselves. Communities that judiciously implement broadband gigabit city networks economically outperform those who do not. Unlike other municipalities, Newmarket has a tremendous opportunity to install a gigabit broadband city network because it has the potential political will and owns the local hydro. As Newmarket citizens, we should support the pro broadband gigabit city initiative and secure Newmarket’s future.

By: Ron Pickett MBA, CMC

RDM Management Group

Ron Pickett is President of RDM Management Group, a Newmarket consulting firm specializing in business innovation, and technology strategy consulting. Ron is also Vice President of the Canadian Telecommunications Consultant’s Association, and a University Instructor teaching business innovation strategy at Georgian College.